Trump should wage a war on waste instead of battling the world over trade

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Disclosure statement

Clyde Hull is a Professor of Management at the Saunders College of Business at RIT. He is also an associate faculty member of RIT’s Golisano Institute for Sustainabilty, which includes the Center for Remanufacturing and Resource Recovery. He is not involved in the Center’s operations.

President Donald Trump is fighting the wrong fight in his ongoing trade war with the rest of the world.

That’s because it’s premised on the old-school notion of the linear economy in which someone in another country, such as China, digs up raw materials and sends them to a factory, where they get turned into the finished product and shipped to the U.S. In exchange, money leaves the U.S. economy and flows to the countries where the product was made – creating the trade deficit Trump despises.

And here’s the important bit. Americans use the product for a while, throw it away, and it ends up in a dump. And then we buy another import.

As a researcher of corporate social responsibility, I’ve been exploring whether consumers are willing to buy more goods that have been remanufactured. My research suggests the answer is yes – if companies can figure how to produce more of them. And that’s where Trump and the federal government could play a big role.

Companies leading the charge

For now, companies and others in the American private sector are trying to lead the way, such as construction and mining equipment maker Caterpillar and automaker General Motors.

The nonprofit sector has also been playing a role, both in terms of research and practical efforts. Since 1991, the Center for Remanufacturing and Resource Recovery at my own Rochester Institute of Technology in upstate New York, for example, has been working with organizations such as the U.S. Marines Corps and Staples to take advantage of circular economy principles.

The center helped the Marines remanufacture defective drive shafts for light armored vehicles, which has saved the military force 78 percent versus the cost of buying them new. It also partnered with Staples to cut the use of non-recycled materials in office furniture by almost 90 percent while reducing the cost to the customer by over 40 percent.

The U.S. could reuse more of their plastics, like Kenya did when they sailed the first dhow boat made entirely of recycled plastic.Reuters/Baz Ratner

Benefits of circular logic

That’s just one company. Scaling up could yield over $1 trillion a year in savings globally – and that’s just in terms of mining and processing fewer raw materials. More broadly, were the European Union, for example, to replace all its imports with locally reused or recycled alternatives, it alone could generate $300 billion to $600 billion a year in savings, according to a 2012 report by the Ellen MacArthur Foundation, a U.K. charity focused on promoting the transition to a circular economy.

Remanufacturing in the U.S. is already responsible for 180,000 jobs across sectors as diverse as aerospace, consumer products, office furniture and retreaded tires. Given how much the U.S. currently imports from abroad – and that remanufacturing is still less than 2 percent of total manufacturing in the U.S. – there’s room to create hundreds of thousands more jobs.

How Trump could help

While there are many ways the U.S. government could marshal its tremendous resources behind this effort, there are two in particular I think would pay dividends.

Both revolve around a core problem in remanufacturing: Most things we currently make can’t be remanufactured. That’s partly because of social barriers — customers may confuse remanufactured with used, which is a very different thing — and partly because they’re not made to be remanufactured.

Plastics in particular pose a significant problem to moving toward a circular economy. Globally, we only recycle or reuse about 9 percent of the plastic produced each year, with 79 percent going to landfills and 12 percent being burned.

Trump could support two ways to help solve this problem. Basically, with a carrot and a stick. The carrot involves setting a standard of design to ensure all products are made with future use in mind, as well as using his influence to encourage Americans to buy goods remanufactured in the U.S.

The stick is tax policy. Specifically, the government could tax products that can’t be converted into raw materials after they are used, as well as those that are made with less than a certain percentage of reused components – a minimum that would be set to gradually increase. Money raised through this tax could be used to support research into remanufacturing, community efforts to reach higher recycling and reuse targets, or other purposes.

Trump toured the advanced manufacturing lab at Northeast Iowa Community College in Peosta, Iowa.Reuters/Joshua Roberts

Remanufacturing for the win

Some countries are already reducing their imports by going circular, putting the United States at risk of falling behind.

In an entirely circular economy, the U.S. would most likely still import stuff from abroad, such as steel from China. But that steel would wind up being reused in American factories, employing tax-paying American workers to manufacture new goods.

In other words, the more circular Americans make their economy, the fewer products they’ll wind up importing and the more things that could bear the “Made in the USA” label.

A welder fabricates a steel structure at an iron works facility in Ottawa on March 5, 2018. U.S.President Donald Trump’s stated intention to impose new tariffs on steel and aluminum imports could start a trade war.
THE CANADIAN PRESS/Sean Kilpatrick